PhilHealth may go bankrupt in 2022 if COVID pandemic remains, says official

Senators on Tuesday expressed disbelief when the government-run medical insurance agency warned during an inquiry it may collapse and stop operations in two years due to lack of funds.

The Senate, sitting as a committee-on-the-whole, grilled for hours executives of the Philippine Health Insurance Corp. (PhilHealth) after a whistleblower had exposed widespread corruption in the agency.

The medical insurance senior vice president, Nerissa Santiago, shocked senators when she told them the agency will no longer have reserve funds by next year.

“One year lang po ang actuarial life,” Santiago told the congressional inquiry.

“Are you saying in 2022, there will be no PhilHealth?” Senate’s minority leader Franklin Drilon asked her.

“Yes,” Santiago answered.

She said PhilHealth’s incurred net operating loss for this year has ballooned to over 90 billion pesos due to high payouts and decreased collections.

Many businesses were forced to scale down operations, if not outright shut down during the lockdown from March.

PhilHealth was also tasked by the government to shoulder expenses for its expanded testing measures, which have reached 1.4 million tests conducted.

“If the COVID pandemic persists until 2021 and no vaccine is discovered, we will incur about 147 billion pesos in terms of operating loss,” said Santiago.

Before the COVID-19 pandemic, the agency was expected to remain afloat for 10 years.

Retired Brigadier General Ricardo Morales, the agency head, had said it would not be able to fulfill their obligations to shoulder medical costs under the Universal Health Care law because of low funds.

Several lawmakers from both the lower and upper chambers of Congress doubted Santiago’s statement.

Senator Ralph Recto said PhilHealth would still have additional income from sin taxes.

“If you spend roughly around 50 billion pesos for this year, you will still have around 60 billion pesos for next year,” Recto said.

Albay Representative Joey Salceda said in 2018, the formal sector paid 65 billion pesos in premiums but only received around 26 billion pesos in claims

“To say that PhilHealth is now struggling with sustainability is to suggest that during these years when PhilHealth premiums exceeded claims, not enough was done to strengthen the GOCC’s financial position,” Salceda said,

“While we understand the extraordinary burden that COVID-19 has placed on the insurance system, and we in Congress have expressed willingness to infuse capitalization to cover the COVID-attributable upsurge in claims, we have to hold the PhilHealth to account for its apparent mismanagement of public finances.”

Government spokesman Harry Roque, on the other hand, said they were ready to infuse PhilHealth with the necessary funds.

“As author of the Universal Healthcare, we never, even for one minute, considered that the survival rate of PhilHealth will solely be by reason of premiums,” he said in a virtual briefing on Tuesday,

“Kung maubos ang pera ng PhilHealth, gobyerno ang magbibigay ng pondo,” he said.